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InDisputes: Competent Authority Results 2021 – Ireland firmly on the MAP

AUTHORs: Tomás Bailey, Joe Duffy, John Ryan, Nicola Dunleavy co-author(s): Rachel O'Sullivan, James McGovern Services: Tax DATE: 10/06/2022

Irish Revenue's Annual Report for 2021 (the "2021 Report") highlights a clear increase in mutual agreement procedure ("MAP") activity in Ireland.  The 2021 Report demonstrates the significant importance placed by Irish Revenue on the availability of MAP for taxpayers, as illustrated by its continued impressive performance in handling and resolving MAP cases.

2021 Competent Authority Activity

Key points highlighted in the 2021 Report include:

  • 171 MAPs were initiated in 2021.  This represents close to a 50% increase on the number of MAPs initiated in 2020.
  • 172 MAPs were completed in 2021.  This is a significant increase on the 38 MAPs completed in 2020.
  • Notably, only 17 of the MAPs completed in 2021 related to transfer pricing (up from 11 in 2020) and only 23 transfer pricing MAPs were initiated in 2021 (down from 48 in 2020).
  • Opening case inventory for 2021 was 151 while closing case inventory was 150.  Ireland's efficiency in this context is further highlighted by the fact that, as noted, 171 new MAPs were initiated during the year.

It is also worth noting that 11 advance pricing agreement ("APA") requests were received in 2021 (a decrease on the 22 received in 2020) with 3 APAs concluded during the year.

Most Improved MAP Jurisdiction

In 2021, Ireland received an award from the OECD based on its MAP statistics for 2020.  Ireland was selected as the 'Most Improved Jurisdiction' in 2020, as the jurisdiction demonstrating the greatest increase in the number of MAPs closed with unilateral relief or full agreement (as compared to the previous year).

The number of MAPs initiated in Ireland increased by an average of 65% year-on-year from 2016 to 2020.  By comparison, the average year-on-year increase across the other EU27 Member States (excluding Cyprus) during this period was 10%. 

The increase in MAPs initiated in Ireland in recent years has been accompanied by a corresponding improvement in the time taken to resolve MAPs.  In 2018, MAPs involving Ireland took significantly longer than the EU27 average to resolve.  By 2020, MAPs involving Ireland were resolved in half the EU27 average time. 

Advice for Clients

The 2021 Report highlights the ability of the Irish competent authority to handle an increasing MAP case load while also continuing to improve overall MAP efficiency.  This welcome trend should be further enhanced in light of the introduction of MLI mandatory binding arbitration in many of Ireland's double taxation agreements.